Panel likely to end slots bill

House speaker expects committee vote today

`I don't think this ... is ready'

Ehrlich's budget chief warns of `dire' results

April 02, 2003|By Michael Dresser and David Nitkin | Michael Dresser and David Nitkin,SUN STAFF

Gov. Robert L. Ehrlich Jr.'s proposal to allow slot machines at Maryland racetracks appears headed for defeat in a House committee today, despite a warning from the state's budget chief that such an action would have "dire" consequences.

House Speaker Michael E. Busch said after a Ways and Means Committee hearing on the bill yesterday that he expects the panel to vote on the measure today.

"I don't think this legislation is ready to be passed," Busch said after sitting through Budget Secretary James C. "Chip" DiPaula Jr.'s defense of the bill, which was approved by the Senate more than a week ago.

Negotiators trying to reconcile the House and Senate versions of next year's state budget continued to wrangle into the evening. The two sides remained far apart on numerous issues - among them whether to count on any revenue from slots.

With Ehrlich threatening to veto several of the tax proposals that lawmakers have adopted as a substitute for one with slots-based revenues, lawmakers began discussing their own dire scenario - a list of up to $1 billion in spending cuts that could be triggered automatically if Ehrlich rejects the legislative budget compromise.

Busch's anti-slots stand appeared to gain support on the 22-member House committee as DiPaula took an unbending stand yesterday against any move to tie gambling legislation to major tax increases.

"It's like a wake without the booze," lobbyist Gerard E. Evans said jokingly after the hearing.

DiPaula, the sole witness heard by the committee, warned delegates that failure to pass slots legislation would bring about unpleasant consequences, including state employee layoffs, drastic budget cuts and the demise of the education funding formula crafted by the Thornton Commission.

"Any delay in implementation of this bill is not a costless proposition," DiPaula said.

The budget secretary's portrayal of a Maryland without slots was one of deep budgetary gloom, which he punctuated by repeated use of the word "dire."

DiPaula's hard-line stance did nothing to budge the House speaker, who sat through the hearing without speaking. Busch, who has pushed through a bill calling for a year of study of the ramifications of slots, said he sees no reason for the House to act out of "a sense of desperation."

The budget secretary's hand was weakened by the fact that the Senate is counting on only $15 million from slots to balance next year's budget.

As they negotiate on the budget, lawmakers are considering other new revenue sources, including $49 million from a tax on health maintenance organization premiums. The House budget includes $125 million in corporate filing fees and $35 million from closing tax loopholes. The Senate has adopted a $16 million tax on smokeless tobacco and cigars. Ehrlich has ruled out each of those.

In anticipation of a veto, budget negotiators began reviewing yesterday a drastic series of cuts that would occur if and when Ehrlich rejected a tax package or a separate revenue bill - setting up a high-stakes game of chicken with the executive branch.

If the governor vetoed $225 million in revenue, lawmakers say, their options might include cutting higher education another 2.5 percent, taking back $25 million in income tax that is supposed to be given to counties, and eliminating Ehrlich's juvenile-services initiative.

A $1 billion "super doomsday" cut list would likely include some layoffs of state employees, plus a $171 million cut to higher education.

"People ought to understand the consequences," said Del. Howard P. Rawlings, chairman of the House Appropriations Committee. "If we somehow don't pass these [tax] bills, or if the governor vetoes them, these are the consequences."

As he argued for slots, DiPaula was focused less on the present budget than on the state's long-term financial problems - contending that slots would eventually provide $700 million of the $1.3 billion a year Maryland needs to fund a commitment to public schools adopted a year ago.

Although Ehrlich had said during his campaign that he would fund the education initiative known as the Thornton plan regardless of whether slots were approved, DiPaula explicitly linked the two issues.

DiPaula emphasized several times the administration's willingness to work with lawmakers to solve the state's budget problems. However, he showed no flexibility on the issues of a higher sales or income tax, or slot machines at locations other than racetracks - prompting a complaint from the committee's vice chairman.

"It seems like you've put up these walls. And then you say you want to work with us," said Del. Anne Healey, a Prince George's County Democrat.